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| 8-K - Digital Cinema Destinations Corp. | e611520_8k-digital.htm |
News Announcement
DIGIPLEX REPORTS SOLID FISCAL 2014 FIRST QUARTER RESULTS, INCLUDING ACROSS-THE-BOARD PER CAP INCREASES
- Company Continues Achieving Circuit Growth and Operational Improvements -
WESTFIELD, New Jersey (November 7, 2013) – Digital Cinema Destinations Corp. (NasdaqCM: DCIN) (Digiplex), a fast-growing motion picture exhibitor dedicated to transforming movie theaters into digital entertainment centers, today reported its fiscal 2014 first quarter financial results for the three-month period ended September 30, 2013.
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DATE/TIME: Today-Thursday, November 7, 2013 at 4:30 pm ET
TELEPHONE: dial 800 268 5851. Please call at least five minutes in advance to ensure that you are connected.
WEBCAST: live webcast is available through the Investor Relations section of Digiplex’s website at www.digiplexdest.com. A webcast replay will be available and accessible for at least 30 days following the live event.
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SUMMARY AND SUPPLEMENTARY FINANCIAL DATA
(unaudited)
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Three Months Ended
September 30,
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(in thousands)
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2013
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2012
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Consolidated total revenue
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$ | 11,469 | $ | 4,347 | ||||
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Consolidated net loss
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(1,374 | ) | (661 | ) | ||||
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Consolidated theater level cash flow (1)
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1,829 | 1,009 | ||||||
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Adjusted EBITDA of Digital Cinema Destinations Corp. (1)
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1,007 | 358 | ||||||
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Theaters (period end)
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19 | 9 | ||||||
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Average screens
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183 | 73 | ||||||
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Average attendance per screen
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5,893 | 5,690 | ||||||
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Average admission per patron
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$ | 7.59 | $ | 7.23 | ||||
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Average concessions sales per patron
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$ | 3.27 | $ | 2.88 | ||||
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Total attendance (in thousands)
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1,077 | 416 | ||||||
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(1)
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Theater level cash flow and Adjusted EBITDA are supplemental non-GAAP financial measures. Reconciliations of these metrics to the net loss for the three months ended September 30, 2013 and 2012 are included in the supplementary tables accompanying this news announcement.
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Digiplex Chairman and CEO Bud Mayo stated, “The September quarter was another productive period for Digiplex as well as for the overall U.S. box office, which rose more than 6%, buoyed by a record-setting summer slate. Importantly, our growing organization again achieved revenue, Adjusted EBITDA, and theater level cash flow increases, versus the year-ago period. Per screen attendance, admissions and concessions sales also trended higher in fiscal Q1 2014, compared to Q1 ’13 levels, over our considerably larger theater and screen base.
“To support future circuit growth we successfully completed a $5.7 million registered direct offering of DCIN Class A Common Stock to institutional investors in October, pursuant to our effective shelf registration statement. In addition to footprint expansion, gross proceeds are expected to be utilized for general corporate purposes, which may include repayment of debt, capital expenditures, the acquisition of additional units of membership interest in our joint venture, Start Media/Digiplex, LLC and the financing of ongoing operating expenses and overhead.
“Several weeks after the share offering we entered into asset purchase agreements to acquire an 8-plex located in Mechanicsburg, PA (Harrisburg DMA 39) as well as a 7-screen theater based in Churchville, MD (Baltimore DMA 27). In addition, we signed a multi-year theater operating lease that takes effect April 1, 2014. We expect to begin occupancy of the New Smyrna Beach, FL (Daytona DMA 19) 12-plex in late spring or early summer next year, following completion of digital projection system installations at this location. This entertainment complex will be operated under Digiplex’s theater management agreement with Start Media/Digiplex. Additionally, today we entered into an asset purchase agreement to acquire a 10-plex in Londonderry, NH (Boston DMA 7), and also announced the upcoming addition of two screens to an existing theater.”
(financial tables follow)
DIGITAL CINEMA DESTINATIONS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
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September 30,
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June 30,
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2013
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2013
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ASSETS
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CURRENT ASSETS
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Cash and cash equivalents
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$ | 1,337 | $ | 3,607 | ||||
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Accounts receivable
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660 | 697 | ||||||
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Inventories
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170 | 191 | ||||||
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Deferred financing costs, current portion
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357 | 357 | ||||||
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Prepaid expenses and other current assets
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1,391 | 1,444 | ||||||
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Total current assets
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3,915 | 6,296 | ||||||
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Property and equipment, net
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29,163 | 29,171 | ||||||
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Goodwill
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3,156 | 3,156 | ||||||
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Intangible assets, net
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6,029 | 6,186 | ||||||
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Security deposits
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207 | 205 | ||||||
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Deferred financing costs, long term portion, net
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1,135 | 1,225 | ||||||
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Other assets
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47 | 9 | ||||||
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TOTAL ASSETS
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$ | 43,652 | $ | 46,248 | ||||
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LIABILITIES AND EQUITY
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CURRENT LIABILITIES
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Accounts payable
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$ | 1,997 | $ | 2,478 | ||||
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Accrued expenses and other current liabilities
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1,957 | 3,964 | ||||||
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Notes payable, current portion
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1,746 | 1,373 | ||||||
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Capital lease, current portion
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97 | 121 | ||||||
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Earn out from theater acquisitions
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355 | 296 | ||||||
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Deferred revenue
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375 | 305 | ||||||
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Total current liabilities
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6,527 | 8,537 | ||||||
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NONCURRENT LIABILITIES
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Notes payable, long term portion
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8,397 | 8,615 | ||||||
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Capital lease, net of current portion
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240 | 239 | ||||||
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Unfavorable leasehold liability, long term portion
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150 | 159 | ||||||
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Deferred rent expense
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512 | 407 | ||||||
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Deferred tax liability
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206 | 199 | ||||||
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TOTAL LIABILITIES
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16,032 | 18,156 | ||||||
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COMMITMENTS AND CONTINGENCIES
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STOCKHOLDERS' EQUITY
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Preferred Stock, $.01 par value, 10,000,000 shares authorized as of September 30, 2013 and June 30, 2013, 6 shares of Series B Preferred Stock issued and outstanding as of September 30, 2013 and June 30, 2013 and 2012, respectively
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- | - | ||||||
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Class A Common stock, $.01 par value: 20,000,000 shares authorized; and 5,642,208 and 5,511,938 shares issued and outstanding as of June 30, 2013 and 2012, respectively
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56 | 55 | ||||||
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Class B Common stock, $.01 par value, 900,000 shares authorized; 849,000 and 865,000 shares issued and outstanding as of September 30, 2013 and June 30, 2013, respectively
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8 | 9 | ||||||
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Additional paid-in capital
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26,418 | 25,816 | ||||||
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Accumulated deficit
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(8,100 | ) | (7,049 | ) | ||||
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TOTAL STOCKHOLDERS' EQUITY OF DIGITAL CINEMA DESTINATIONS CORP.
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18,382 | 18,831 | ||||||
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Non-controlling interest
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9,238 | 9,261 | ||||||
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Total equity
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27,620 | 28,092 | ||||||
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TOTAL LIABILITIES AND EQUITY
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$ | 43,652 | $ | 46,248 | ||||
DIGITAL CINEMA DESTINATIONS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except share and per share data)
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Three Months Ended
September 30,
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2013
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2012
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REVENUES
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Admissions
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$ | 7,758 | $ | 3,009 | ||||
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Concessions
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3,338 | 1,199 | ||||||
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Other
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373 | 139 | ||||||
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Total revenues
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11,469 | 4,347 | ||||||
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COSTS AND EXPENSES
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Cost of operations:
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Film rent expense
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3,778 | 1,412 | ||||||
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Cost of concessions
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602 | 164 | ||||||
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Salaries and wages
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1,450 | 513 | ||||||
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Facility lease expense
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1,470 | 523 | ||||||
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Utilities and other
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2,386 | 768 | ||||||
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General and administrative
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1,318 | 737 | ||||||
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Change in fair value of earn out
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59 | - | ||||||
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Depreciation and amortization
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1,335 | 849 | ||||||
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Total costs and expenses
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12,398 | 4,966 | ||||||
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OPERATING LOSS
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(929 | ) | (619 | ) | ||||
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OTHER EXPENSE
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Interest expense
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(351 | ) | (23 | ) | ||||
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Non-cash interest expense
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(76 | ) | (2 | ) | ||||
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Other expense
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(9 | ) | - | |||||
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LOSS BEFORE INCOME TAXES
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(1,365 | ) | (644 | ) | ||||
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Income tax expense
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9 | 17 | ||||||
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NET LOSS
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$ | (1,374 | ) | $ | (661 | ) | ||
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Net loss attributable to non-controlling interest
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323 | - | ||||||
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Net loss attributable to Digital Cinema Destinations Corp.
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$ | (1,051 | ) | $ | (661 | ) | ||
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Preferred stock dividends
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(5 | ) | (1 | ) | ||||
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Net loss attributable to common stockholders
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$ | (1,056 | ) | $ | (662 | ) | ||
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Net loss per Class A and Class B common share- basic and diluted attributable to common stockholders
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$ | (0.16 | ) | $ | (0.12 | ) | ||
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Weighted average common shares outstanding:
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6,470,484 | 5,419,452 | ||||||
SUPPLEMENTARY NON-GAAP RECONCILIATION
OF THEATER LEVEL CASH FLOW
(Unaudited) ($ in thousands)
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Three months ended September 30,
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2013
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2012
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Net loss
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$ | (1,374 | ) | $ | (661 | ) | ||
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Add back:
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General and administrative (1)
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1,318 | 737 | ||||||
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Depreciation and amortization
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1,335 | 849 | ||||||
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Income tax expense
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9 | 17 | ||||||
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Interest expense
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427 | 25 | ||||||
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Other expense
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9 | - | ||||||
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Deferred rent expense (5)
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105 | 42 | ||||||
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Consolidated TLCF
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$ | 1,829 | $ | 1,009 | ||||
SUPPLEMENTARY NON-GAAP RECONCILIATION
OF ADJUSTED EBITDA
(Unaudited) ($ in thousands)
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Three months ended September 30,
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2013
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2012
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Net loss
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$ | (1,374 | ) | $ | (661 | ) | ||
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Add back:
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Depreciation and amortization
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1,335 | 849 | ||||||
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Interest expense
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427 | 25 | ||||||
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Income tax expense
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9 | 17 | ||||||
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Other expense
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9 | - | ||||||
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Deferred rent expense (5)
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105 | 42 | ||||||
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Stock-based compensation (2)
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239 | 43 | ||||||
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Non-recurring organizational and M&A-related professional fees (3)
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56 | 43 | ||||||
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Management fees (4)
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286 | - | ||||||
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Start Media's share of adjusted EBITDA
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(85 | ) | - | |||||
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Adjusted EBITDA of Digital Cinema Destinations Corp.
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$ | 1,007 | $ | 358 | ||||
(1) TLCF is intended to be a measure of theater profitability. Therefore, our corporate general and administrative expenses have been excluded.
(2) Represents the fair value of shares of Class A common stock and restricted stock awards issued to employees and non-employees for services rendered. As these are non-cash charges, we believe that it is appropriate to show Adjusted EBITDA excluding this item.
(3) Primarily represents professional fees incurred in connection with specific acquisitions. Since the amounts will vary depending on the size and quantity of any acquisition, and are not part of ongoing operations of our theaters, we believe that it is appropriate to exclude these items from Adjusted EBITDA.
(4) To add back management fees to Digiplex from Start Media/Digiplex, LLC.
(5) Represents non-cash deferred rent expense which is included in our facility lease expense in the consolidated statements of operations. As these are non-cash changes, we believe it is appropriate to show TLCF and Adjusted EBITDA excluding this item.
Disclosure Regarding Forward-Looking Statements
This press release and other written or oral statements made by or on behalf of Digital Cinema Destinations Corp. may contain forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts, including statements about our beliefs, expectations and future performance, are forward-looking statements. Forward-looking statements are only predictions and are not guarantees of performance. These statements are based on beliefs and assumptions of management, which in turn are based on currently available information. The forward-looking statements also involve risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. Many of these factors are beyond our ability to control or predict. Risk factors are disclosed in our Annual Report on Form 10-K under the caption “Risk Factors.” We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.
About Digital Cinema Destinations Corp. (www.digiplexdest.com)
Digital Cinema Destinations Corp. (NasdaqCM: DCIN) is Digiplex Destinations, dedicated to transforming its movie theaters into interactive entertainment centers. The Company provides consumers with uniquely satisfying experiences, combining state-of-the-art digital technology with engaging, dynamic content that far transcends traditional cinematic fare. The Company's customers enjoy live opera, ballet, Broadway shows, sports events, concerts and, on an ongoing basis, the very best major motion pictures. Digiplex operates 19 cinemas and 184 screens in AZ, CA, CT, OH, PA, and NJ. You can connect with Digiplex via Facebook, Twitter, YouTube and Blogger.
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Contacts:
Bud Mayo, Chairman/CEO
Digital Cinema Destinations Corp.
908/396-1362 or bmayo@digiplexdest.com
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Robert Rinderman or Jennifer Neuman
JCIR – Investor Relations/Corporate Communications
212/835-8500 or DCIN@jcir.com
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